The Hindu Business Line : Profit-taking checks Sensex progress

It was another bumpy ride for the investors on the Indian stock markets on Tuesday. Markets tried to keep the upward momentum going but profit booking pulled the Sensex down every time it neared 12800. The Sensex swung up and down in a 100-point band between 12700 and 12800 before ending half a per cent up.

Inflation fighting and interest rates hogged the limelight as the Bank of Japan kept its interest rates unchanged at 0.5 per cent. The Asian markets were consequently buoyed and closed with decent gains. As the Federal Open Markets Committee's meeting in the US gets under way, global markets are eagerly expecting some signal that there could be rate cut in the near future.

Chinese regulator is once again on the move to curb their stock markets from heating up further. This time they have barred companies from using proceeds from share sales for investing in the stock markets.

Crude prices on Nymex for April delivery dipped below $57 on expectation of a build-up in the inventory and fears of a global slowdown affecting the crude oil prices. Indian rupee rose for the fourth day in a row to an 18-month high. This affected the technology stocks adversely. Infosys closed 1.5 per cent lower. TCS and Wipro too closed in the red.

Market breadth neutral

Market breadth started out very strong on Tuesday morning but as volatility increased, it shrunk and closed on a neutral note. Interest was seen in the mid-cap and small-cap stocks during the trading session. Both the BSE mid-cap index andthe BSE small-cap index closed in the green.

Investors seem to be sitting on the sidelines, waiting for the right opportunity to buy. Lower-than-average volumes recorded in the cash as well as the derivatives segments underline this fact.

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Bank stocks saw some bargain hunting at lower levels. State Bank of India led the market up, surging 2.6 per cent. HDFC Bank was the other strong gainer on the Sensex with 3 per cent gain. Some bottom fishing was also apparent in cement stocks. Grasim surged by 4 per cent, Gujarat Ambuja Cements rallied 3 per cent and ACC closed 1 per cent higher.

Tea stocks firm

Tea stocks captured the investor's fancy in Tuesday's session. Many of the mid-cap and small-cap tea stocks flared up. McLeod Russell closed 5 per cent up, Dhunseri Tea and Harrison Malayalam too gained 5 per cent. Jayshree Tea was up 11 per cent and Williamson Magor was up 3 per cent

Ranbaxy Laboratories pulled out the race to acquire the German pharmaceutical company Merck's generic business citing overvaluation as a concern. The news was well received by the stock markets and the stock closed 6 per cent higher.

CMC continued to put up a strong showing. It made a new high on Tuesday. Other stocks to make it to the new highs list were Wartsila Industries, Alphageo, Dynamic Industries, Infoedge and BAG Films. Stocks that made a new low included sugar stocks such as Dwarikesh Sugar, Monet Sugar, Gayatri Sugar and Andhra Sugar.

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